Cooper Tire Rubber Company claims to be the fourth largest tire manufacturer in North America. Goodyear Tire & Rubber Company is the largest tire manufacturer in North America. The following information was taken from these companies’ December 31, 2004, annual reports. All dollar amounts are in thousands.

Required:

a. Calculate depreciation costs as a percentage of sales for each company.

b. Calculate buildings, machinery, and equipment as a percentage of total assets for each company.

c. Which company appears to be using its assets most efficiently? Explain your answer.

d. Identify some of the problems a financial analyst encounters when trying to compare the use of long-term assets of Cooper versus Goodyear.

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Sales Depreciation costs Buildings, machinery, and equipment (net of accumulated depreciation) Total assets Depreciation method Estimated life of assets: Buildings Machinery and equipment $2,081,609 Cooper Tire Goodyear Tire $18,370,400 109,805 628,700 4,629,800 16,533,300 Straight-line 694,386 2,668,084 "Straight-line or accelerated" 10 to 40 years 40 years 4 to 14 years 15 years